Balancer Labs, the team behind the DeFi protocol Balancer, is closing after mounting financial pressure following a $116 million exploit in November. Executives say the protocol itself will continue under a leaner structure.
Fernando Martinelli, a Balancer Protocol founder, said he decided to wind down Balancer Labs, calling the company “a liability rather than an asset to the protocol” after operating without revenue. CEO Marcus Hardt added the company was spending too much to attract liquidity relative to the protocol’s revenue, a strategy that diluted BAL token holders.
Balancer was a leading DeFi protocol in the 2020–2021 bull market, peaking at a $3.3 billion total value locked (TVL) in November 2021. By October 2025 TVL had fallen to $800 million, and the November hack precipitated another roughly $500 million decline within two weeks. Balancer’s TVL now stands near $158 million, underscoring how difficult recovery from large-scale hacks can be. Martinelli said the exploit “created real and ongoing legal exposure,” and maintaining a corporate entity that carries liability for past security incidents was unsustainable.
Executives propose that Balancer’s future be run by the Balancer Foundation and the protocol’s decentralized autonomous organization (DAO). Martinelli and Hardt advocate a “lean continuation path” that would cut BAL emissions to zero, restructure fees to allow the DAO to capture more revenue, shrink the team to the minimum necessary, and target much lower operating costs.
Hardt said Balancer “still has real value to build from here,” and that a successful transition could yield a stronger, more sustainable protocol. DAO members have been asked to vote on two proposals covering operational restructuring and BAL tokenomics revamp.
Despite tokenomics challenges, Martinelli noted Balancer has been generating real revenue—more than $1 million over the past three months—calling it “a functioning protocol buried under a broken tokenomics model and an overweight cost structure.” He and others emphasize the problem is economic, not technical: “The problem isn’t that Balancer doesn’t work. The problem is that the economics around Balancer aren’t working. Those are fixable.”